The Financial Accounting Standards Board, a U.S.-based entity that outlines how companies should report their assets on their balance sheets, published on Wednesday a standard update that will allow corporations to recognize “fair value changes” in crypto holdings.

This move will be beneficial to companies like MicroStrategy, which have crypto in their balance sheet. According to the current rulebook, a company must report a loss even if it hasn’t sold any assets if their crypto is worth less than what they paid for them. Companies will be required to disclose the cost-basis, fair value and type of assets that they hold under the new rules.

The update document stated that stakeholders providing feedback to FASB claimed the existing guidance was not useful for investors or any other parties.

The document stated that “Accounting only for the decreases in value, but not increases, of crypto assets until they are sold, does not provide pertinent information which reflects (1) the economics underlying those assets, and (2) the financial position of an entity.”

Document stated that the new rules had been unanimously adopted by the board. They will come into effect after December 15, 2024.

In a section that explains how FASB came to adopt new guidance, it said they received a large amount of feedback in support of a new approach towards digital assets.

The document stated that “Stakeholders feedback, including responses to the FASB 2021 Invitation to Comment (ITC) Agenda Consultation indicated that improving accounting for and disclosing crypto assets should be the Board’s top priority.” Nearly 500 respondents to 2021 ITC asked that the Board include a project relating to crypto assets on its agenda.

FASB worked on updating accounting rules regarding crypto holdings for several months. FASB indicated in September that it would adopt new guidance.

Michael Saylor, MicroStrategy founder and former CEO , previously tweeted, that the move would allow corporations to adopt Bitcoin as a treasury-asset, an argument which he repeated after the FASB guidelines were released.

BTC Price Index and Live Chart – CoinDesk”>(BTC) price rose more than 1% after the guidance was released, trading around $42,150 as of press time.

Stephen Alpher edited the book.